Category: News This Week

Philip Morris International (PMI) is warning that the company may close its Hong Kong research center in light of government proposals to ban e-cigarettes and other new smoking products. PMI has invested more than hkd78 million ($ 10 million) in the Wong Chuk Hang facility, which opened in July 2018.

Brett Cooper, general manager of the Hong Kong and Macau branch of Philip Morris Asia, said the company had been lured to set up the facility in Hong Kong on the promise of innovation and technology, but now the possible closure of the site could put the jobs of more than 60 local employees at risk.

“There hasn’t been a lot of clarity … the government has changed its mind a little bit. I think that it could have been clearer, as that could help us in terms of investment,” Cooper said.

A spokesman for the Food and Health Bureau said that the government is aiming to pass the bill to ban e-cigarettes and other smoking alternatives as soon as possible.

British American Tobacco (BAT) Chairman Richard Burrows said the company is expecting another year of profit growth, despite concerns of tighter regulations in the United States.

BAT forecast earlier this year that the company would have “another year of high single figure adjusted constant currency earnings growth” for 2019 and noted a board proposal to increase its dividend by 4 percent.

“While our business is continuing to perform very well we are very conscious that investor sentiment over the last year has been negatively impacted by concerns over possible regulation in the U.S. and competitor dynamics in new categories resulting in a sharp fall in our share price,” Burrows said.

“I am, however, confident that the business is in good shape and that the causes of these concerns in fact present significant opportunities for future growth.”

Zimbabwe’s tobacco output is expected to decline to 200 million kilograms this year owing to unfavorable weather conditions under which the crop was grown, reports The Herald.

Last year, the country produced an all-time high of 252 million kilograms of tobacco.

The tobacco being sold this year was grown under poor weather conditions characterized by late rains and prolonged dry spells.

“It is hard to tell how much tobacco we are expecting. We do not even  want to guess. We are just praying that at least we get to 200 million  kilograms (of tobacco),” said Tobacco Industry and Marketing Board chairperson Monica Chinamasa.

Philip Morris International (PMI) is launching a life insurance company called Reviti that will offer smokers discounts if they stop, quit, or switch to a vaping device, reports CNBC. Reviti will be a wholly owned subsidiary in the United Kingdom, but have plans to expand into more markets.

People who switch to e-cigarettes will receive a 2.5 percent discount on premiums, people who switch to PMI’s heated tobacco product iQOS for three months will receive a 25 percent discount, and people who quit smoking for at least a year will receive a 50 percent discount, Philip Morris said in a statement.

Philip Morris International’s CEO Andre Calantzopoulos told CNBC that he hopes PMI will stop selling cigarettes altogether.

“Obviously that makes sense for public health and the people who smoke themselves, but it also makes sense for our shareholders because financially, as these products are not cigarettes, they benefit from lower excise taxes and better margins, so it’s a win-win for everybody,” Calantzopoulos said. “That’s why we all move in this direction, and the faster we move out of cigarettes the better for all of us.”

PMI also released a statement yesterday reaffirming its vision for the future: “To achieve a smoke-free world; that is, one without cigarettes…Our strong belief—if you don’t smoke, don’t start—begins with a continued and robust focus on preventing youth from beginning to smoke or use nicotine products.”

More than half of South Korean entertainment media contains  scenes of smoking or displays tobacco products, reports The Korea Times citing data released by the Ministry of Health and Welfare.

The ministry conducted the study to see how much children and adolescents were exposed to smoking scenes and tobacco imagery through media.

The data revealed that 53.3 percent of dramas, 50.4 percent of films and 50 percent of webtoons depicted smoking

“Children and adolescents exposed to smoking scenes repeatedly are more likely to try smoking,” a ministry official said. “We urge entertainment content creators and producers to refrain from showing smoking in content rated for minors.”

The Southeast Asia Tobacco Control Alliance (SEATCA), the World Health Organisation (WHO), and the Cambodia Movement for Health are calling for the Cambodian government to increase the tobacco tax and use the money to expand health care benefits for the general public, reports the Khmer Times.

These groups held a joint press conference and said that 1.68 million adults smoke cigarettes in Cambodia, while about 500,000 chew tobacco, and that tobacco consumption among youth has also increased.

Ulysses Dorotheo, executive director of SEATCA, said Cambodia’s tobacco tax rate of between 25 and 30 percent is still among the lowest in the region.

“Tobacco tax policies have been strengthened in recent years, but they have not yet been used to their full potential to discourage tobacco consumption and raise government revenues for social development programmes,” Dorotheo said.

Yel Daravuth, a WHO representative,  said the tobacco tax should be at least set to 70 percent, and that the revenue should be used to help the social and health sectors.

U.S. Senate Majority Leader Mitch McConnell of Kentucky said that his role in getting industrial hemp legalized is at “the top of the list” of reasons Kentuckians should re-elect him in 2020.

He added that hemp could replace tobacco, historically a large cash crop for Kentucky that could possibly take a hit under new legislation McConnell introduced. The legislation would raise the minimum age requirement for tobacco sales from 18 to 21 nationwide.

“How does my job as majority leader help you? Help Kentucky?” McConnell said at a press conference. “At the top of the list I would put hemp.”

British American Tobacco (BAT) is considering expanding its cigarette manufacturing in Malaysia, three years after shutting down its factory in Petaling Jaya, reports The Edge Markets.

BAT opened a new manufacturing facility in Johor Baru last October.

“We have very consciously done that because we want to retain that manufacturing licence,” BAT managing director Erik Stoel was quoted as saying.

“If we withdraw completely, there is a risk we could lose (the licence). Pending the evolution of the market, we could consider whether or not, on the longer term, it could be interesting to produce and manufacture [more] cigarettes in Malaysia again.”

BAT closed its factory in Petaling Jaya because of a surge in market share of illicit cigarettes following an increase in excise duties, among other reasons.

BAT’s profit fell 4.9 percent in 2018 and revenue slid 3.2 percent.

The government of Malawi has set minimum prices for tobacco ahead of the opening of the marketing season on April 25, reports the Nyasa Times.

The prices will be revealed once the Tobacco Control Commission has met with buyers and other stakeholders.

“The minimum prices are very good, farmers will smile, the minimum prices would benefit our tobacco farmers,” said Felix Thole, chief executive officer of the Tobacco Association of Malawi.

Tobacco is Malawi’s top foreign exchange earner and contributes to 13 percent of the GDP.

United States Senate Majority Leader Mitch McConnell plans to introduce national legislation next month to raise the minimum age for people buying tobacco products from 18 to 21, reports National Public Radio.

McConnell proposed the measure Thursday at a conference with the Foundation for a Healthy Kentucky.

“We have an epidemic of nicotine consumption either through cigarettes or through vaping in high schools and even middle schools, not only in our state but around the country,” McConnell was quoted as saying.

Tobacco market leader Altria praised the move.

Twelve states have already raised the minimum purchasing age.